Dow Jones futures fell overnight, along with S&P 500 futures and Nasdaq futures, as tensions in the Middle East took their toll. Netflix (NFLX) and Intuitive surgery (ISRG) reported better-than-expected first-quarter earnings after the close.
X
Thursday’s stock market rally once again failed to sustain early gains. While it was technically a mixed session, the overall tone remained bearish. The Nasdaq power trend that has been in place since November is about to end.
Nvidia shares moved higher after briefly breaching the 50-day line. But other AI stocks were mixed Nvidia (NVDA) chip maker Taiwanese semiconductor (TSM) falls below the 50-day line despite strong earnings numbers and expectations.
Metaplatforms (META), HubSpot (HUBS) and All states (ALL) recovered from important support.
Tesla (TSLA) fell to a 52-week low, with analysts wary of Elon Musk’s renewed robotaxi focus.
Nvidia and Meta stock are on the IBD Leaderboard. Nvidia, Netflix, and HubSpot stocks are on the IBD 50. Netflix, Nvidia, HubSpot, and Meta Platforms are on the IBD Big Cap 20.
Iran explosions
There are unconfirmed reports of explosions near Isfahan in central Iran, home to one of Iran’s largest nuclear facilities. Explosions were also reported in southern Syria and near Baghdad, Iraq. Israel had said it would respond to Iran’s April 13 missile and drone attack.
Dow Jones futures today
Dow Jones futures fell 0.7% from fair value. Futures on the S&P 500 fell 0.8%. Nasdaq 100 futures fell 0.9%, while shares of Netflix lagged.
The interest rate on ten-year government bonds fell by a few basis points to 4.58%.
Crude oil futures rose 2%.
The news about the explosions in Iran seems to have an influence on Dow futures, interest rates and oil prices.
Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.
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Netflix subscribers, other income
NFLX shares fell sharply in extended trading, signaling they were falling below the 50-day line. Netflix subscribers, revenue and earnings all surpassed viewership in the first quarter, but the streaming giant showed a lower trajectory on revenue in the second quarter. Netflix also said it will stop providing subscriber figures from 2025.
During Thursday’s regular session, shares of Netflix fell 0.4% to 611.15.
ISRG shares rose modestly in overnight action. Intuitive surgery revenues have increased despite solid growth in da Vinci surgical procedures. Shares fell 0.35% to 372.85 on Thursday, falling further below the 50-day mark. Intuitive Surgical stock had a strong run from late October to late March.
Stock market rally
The stock market rally tried to rebound Thursday morning but quickly failed, with the S&P 500, Nasdaq and Russell 2000 all suffering their fifth losses in a row.
The Dow Jones Industrial Average rose about 0.1% in stock trading on Thursday. The S&P 500 index fell 0.2%, but still remained at the 5,000 level. The Nasdaq index lost 0.5%. The small-cap Russell 2000 lost 0.2%.
The major indexes are all well below their 50-day moving averages.
The Nasdaq’s 21-day moving average will almost certainly break below the 50-day mark on Friday. So if Friday is a negative day, that will officially end the power trend, providing further confirmation of the market’s change in character.
US crude oil prices rose four cents to $82.63 a barrel.
Copper prices rose 2.3% to a new 52-week high.
Ten-year Treasury yields rose 6 basis points to 4.65%, recovering as the Philly Fed manufacturing index unexpectedly rose to a two-year high.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 0.7%, while HUBS stock was in the ETF. The VanEck Vectors Semiconductor ETF (SMH) fell 1.75%. Nvidia and TSM stock are SMH’s top holdings.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 0.3% and the ARK Genomics ETF (ARKG) fell 0.1%. Tesla shares are a major stock in Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 0.4%. The US Global Jets ETF (JETS) rose 1.4%. SPDR S&P Homebuilders ETF (XHB) fell 0.1%. The Energy Select SPDR ETF (XLE) fell 0.3% and the Health Care Select Sector SPDR Fund (XLV) closed fractionally lower.
The Industrial Select Sector SPDR Fund (XLI) fell 0.35%. The Financial Select SPDR ETF (XLF) climbed 0.35%, with Allstate shares as a component.
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Nvidia stock
Nvidia shares rose 0.8% to 846.71 after undercutting the 50-day line intraday for the first time in 2024. Shares are still below their 21-day and 10-week lines after falling 3.9% on Wednesday.
NVDA stock has a 974 buy point from a flat base.
Nvidia chipmaker Taiwan Semiconductor topped earnings estimates Thursday and posted higher second-quarter revenue, fueled by strong demand for AI. But Taiwan Semi shares fell 4.9%, below the 50-day mark, due to a lowered outlook for the broader chip industry.
HubSpot stock
HubSpot shares rose 2.55% to 649.58, recovering from the 10-week line and regaining the 21-day line in heavy volume. According to MarketSurge analysis, the stock briefly regained the 660 buy point. HUBS stock broke out on April 4 based on a report from Google Alphabet (GOOGL) was considering a bid for the marketing software maker
Meta stock
Meta shares rose 1.5% to 501.80, rebounding from the first 50-day line test of 2024. At session highs of 512.21, the stock looked serviceable if not for market weakness and Meta’s upcoming gains .
The company launched its Meta AI assistant, which it will roll out across its social sites.
Allstate Stocks
Allstate shares rose 3.8% to 169.11, recovering from the 50-day line in strong volume, breaking a brief downtrend and reclaiming a 168.05 buy point.
The relative strength line, which tracks a stock’s performance against the S&P 500 index, is at a 52-week high. The RS line is the blue line in the included graphs.
Insurers, who traditionally play defensively, are doing well in the current market. But Allstate’s profits are expected to skyrocket in 2024, supported by much higher premiums.
Tesla shares
Tesla shares fell 3.2% to 150.44, breaking below the April 2023 low to the worst level since January 2003. Deutsche Bank downgraded TSLA stock, citing Tesla’s apparent shift away from a small EV to a robotaxi. That means Tesla’s current growth problems could last for several years.
Tesla earnings are expected on April 23, with investors and analysts wanting answers from Elon Musk during the conference call.
Analysis of the market rally
The stock market rally was “on the cards” for a rebound, but again failed to sustain modest morning gains.
There is little or no reason to make new purchases in today’s market, especially with the earnings wave underway.
This is a time to work on watch lists, looking for stocks that are holding or regaining key levels and showing relative strength.
There are very few stocks that can be acted upon
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